U.S. creates 146,000 jobs in November

Unemployment rate falls to 7.7% from 7.9%; Sandy not a factor

WASHINGTON (MarketWatch) — Businesses maintained a steady if unspectacular pace of hiring in November and the unemployment rate fell to the lowest level in four years as the huge U.S. economy brushed off the damage caused by Hurricane Sandy.

The U.S. added 146,000 jobs last month, Labor Department said Friday. The unemployment rate also fell to 7.7% from 7.9%, the lowest level since December 2008, but that was because more people dropped out of the labor force and stopped looking for work.

The latest employment report draws a portrait of an economy growing steadily at 2% a year and adding an average of 150,000 jobs a month. Yet the U.S. would have to expand at a much faster clip and create jobs at twice the current rate to get the economy back on the same growth path before the 2007-2009 recession struck.

On Wall Street, the latest jobs figures drew a positive reaction, though a later report on consumer sentiment dampened those gains. The Dow Jones Industrial Average
DJIA, -1.16%
climbed more than 27 points in recent action. Read Market Snapshot.

Because of Sandy, Wall Street expected a poor employment report. Economists surveyed by MarketWatch had forecast the U.S. to gain just 80,000 jobs in November, with the unemployment rate holding steady.

The government said the storm was largely a nonfactor, however.

“Our analysis leads us to conclude that Hurricane Sandy did not substantially impact the national employment and unemployment estimates for November,” said John Galvin, acting commissioner of the Bureau of Labor Statistics.

Indeed, the pace of job creation in November closely matched hiring trends in October and September after downward revisions. The number of new jobs created in October was reduced to 138,000 from 171,000, while September’s increase was revised down to 132,000 from 148,000.

Although the economy dodged a bullet with Sandy, businesses that might be looking to hire now have something else to worry about: the fiscal cliff. See MarketWatch's fiscal-cliff page

The economy could get hit by a double whammy of big tax increases and federal spending cuts in January unless Democrats and Republicans in Washington break a budget impasse.

Some executives say they will wait to see the outcome before hiring additional workers or making new investments. That could make job-hunting prospects over the next few months even more daunting for the nearly 23 million Americans who want full-time work but can’t find it.

Inside jobs report

The biggest increase in hiring in November occurred in retail, professional services and leisure and hospitality.

Retailers beefed up their staffs by 53,000 employees and some 43,000 professional jobs were created.

In November, average hourly wages rose 4 cents to $23.63. Over the past year, hourly wages are up 1.7%, but workers haven’t benefited because inflation has risen at an even faster clip.

The average hourly workweek, meanwhile, was unchanged at 34.4 hours. The workweek usually rises when the economy gets stronger, but it’s mostly been flat in 2012.

The U.S. has been adding jobs at an accelerated pace since late mid-summer. The number of positions created from July to October averaged 158,000 a month, compared to 67,000 from May through June.

For the full year, though, the economy has created an average of 151,000 jobs a month. That’s barely changed from the 153,000 average in 2011.

The upshot: the U.S. labor market is still relatively weak by historical standards three years after the last recession ended. The economy is not creating jobs fast enough to recoup all the jobs lost during the last slump.

At the current rate of hiring, It could take at least several years to accomplish that task.

The drop in the unemployment rate, meanwhile, was mainly the result of a 350,000 decline in the size of the civilian labor force to 155.3 million. The participation rate fell 0.2% last month to 63.6%.

By contrast, the labor force had increased by a combined 1.7 million in September and October.

The unemployment rate was a much higher 14.4% when including people too discouraged to look for a job or those who have to work part-time even if they want a full-time position. The so-called U6 rate fell from 14.6% in October.

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